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Thursday, September 06, 2007
States Being Hit With Tax Shortfalls
The Wall Street Journal reports that a slumping housing market has many states facing budget crises.
Tremors from the housing market's slump are straining the budgets of state and local governments from coast to coast, sending officials scrambling to plug gaps.
Rising defaults on subprime home loans are boosting the inventory of unsold homes and driving sale prices lower. That's cutting into housing-related revenues from building-permit fees, taxes on contracting and recording property transfers, and even sales taxes.
As a result, legislators in Florida, which was at the forefront of the housing boom, plan a special session this month to consider deep budget cuts to offset a projected $1.5 billion funding gap. California forecasts a shortfall of at least $5 billion in next year's budget. And Chicago faces a $217 million gap in its $5.6 billion budget for 2008.
The whole article is worth a read. One gaffe- it calls the Tax Foundation "nonpartisan," which, while techinically true, is less appropriate than a label like "conservative" or "an organization dedicated to lowering taxes."
Posted by Matt Lewis
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